Railways Not Liable for Short Delivery Under ‘Owner’s Risk’ Booking Without Proof of Quantity Loaded and Negligence: Supreme Court

Case Name: M/s Bajaj Trading Company v. Union of India

Date of Judgment: 16 July 2026

Citation: 2026 INSC 711

Bench: Justice Sanjay Karol and Justice Vipul M. Pancholi

Held: The Supreme Court held that where goods are booked at the “owner’s risk” rate and their quantity or weight is not verified by an authorised railway employee, the consignor must first prove the quantity actually loaded, as required under the proviso to Section 65(2) of the Railways Act, 1989. Section 97 overrides the general responsibility imposed upon the Railways under Section 93 and permits liability to be imposed in an owner’s-risk consignment only upon proof of negligence or misconduct by the Railway Administration or its employees. Unless the consignor discharges the initial burden of proving the quantity entrusted to the Railways, the question of negligence or liability for short delivery does not arise.

Summary: The appellant entrusted 40,444 bags of salt for transportation by rail from Chirai Junction, Gujarat, to Dharmanagar, Assam. At the destination, only 38,702 bags were recorded as delivered, reflecting an alleged shortage of 1,742 bags. The Railway Authorities issued a shortage certificate, following which the appellant claimed ₹3,48,400 as compensation. The Railway Claims Tribunal rejected the claim, and the Gauhati High Court affirmed that decision.

The appellant contended that the Railways remained responsible for the consignment under Section 93 of the Railways Act and that negligence could be inferred from allegations concerning broken seals and open wagons during transit. The Railways argued that the goods had not been counted or weighed by railway staff and that the railway receipt carried the remark “said to contain”. Consequently, under Section 65(2), the burden of proving the number of bags loaded rested upon the consignor.

The Supreme Court held that the non-obstante clause in Section 97 gives it an overriding effect over the general liability contemplated under Section 93. Therefore, where goods are carried at the owner’s-risk rate, the Railways can be held liable only when negligence or misconduct is affirmatively established.

The Court observed that railway employees had not participated in counting, weighing or recording the number of bags loaded. The appellant also failed to produce documents establishing the number of bags procured, processed and dispatched. As the initial burden under Section 65(2) remained undischarged, the Court found no basis to examine whether the alleged shortage had resulted from negligence or misconduct by the Railways.

Decision: The Supreme Court dismissed the appeal and upheld the rejection of the compensation claim. It concluded that the appellant had failed to prove the quantity of goods loaded and, consequently, could not establish negligence or misconduct on the part of the Railways.